Not a Bug user registration - shouldn't it default to UNREGISTERED ?

I was trying out the "Enable manual approval" option in the User and Registration options.

I signed up a new user.
Whilst I was awaiting approval, the username was listed in the registered users group.
When I approved the user, the user was sent the following via email"The account you registered on blah.com community has now been approved. Youmay now view our site as a registered member"

The user was in the registered users group before and after the approval process, shouldn't the user default to unregistered / unconfirmed until the user get's approved and then they go into registered users ?